FG Implements Short-Term Open Borders, Wholesale Traders Fear Losses As Prices Expected To Crash

FG Implements Short-Term Open Borders

The Federal Government’s(FG) decision to implement a short-term open borders policy has sent shockwaves through Nigeria’s wholesale market.

As the policy permits importing certain agricultural products for six months, wholesalers are now scrambling to sell off their old stocks, fearing significant losses.

On Sunday, President Bola Ahmed Tinubu officially directed the Nigeria Customs Service to begin implementing the zero percent import duty and Value-Added Tax (VAT) exemption on basic food items.

The policy, designed to ease the burden of rising food prices, was confirmed by the Ministry of Finance in a letter to the Nigeria Customs Service on August 8, 2024.

Wholesalers Fear Losses

Sambo Adamu, a wholesale trader at Yaba market in Lagos, expressed his concerns about the impact of the open borders policy on his business.

“Prices will crash because once the borders are open, a competitive pricing regime will begin,” Lawal stated. “If I am unable to sell before stocking up and prices crash, I will be at a very serious loss, because we bought some of the goods at very exorbitant prices. It is only fair that we sell off before new products arrive.”

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Lawal, like many other wholesalers, has been urging retailers to purchase his existing stock before the market is flooded with cheaper imports. However, his appeals have largely fallen on deaf ears.

Retailers Hold Off on Purchases

Many retailers, anticipating a price crash, are refusing to buy old stock. Madam Wunmi, who runs a small neighborhood stall, explained her decision to wait.

“My small neighborhood shop is almost empty, but I will wait. My supplier called me last week to come and pick up products, but I am not going,” she said.

“Since last week, some products have become very scarce. I can’t buy spaghetti and macaroni. Even if they are available now, I will not buy them. Let’s see what happens between now and next week. I am very sure the prices will crash.”

Wunmi’s cautious approach reflects the broader sentiment among retailers, who are unwilling to risk buying high-cost goods that may soon lose value.

Consumers Hope for Relief On FG

For consumers like Jumoke, a single mother struggling with rising living costs, the potential price crash is a glimmer of hope.

“The price crash will be the best news. I really can’t wait, but until it happens, let’s just take it as one of the stories we hear,” she remarked.

As the FG short-term open borders policy unfolds, the market remains on edge. Wholesalers are racing against time to offload their old stock, while retailers and consumers alike watch closely, hoping for a much-needed drop in prices.

The coming weeks will reveal whether the FG policy will achieve its intended effect or if it will leave many in the wholesale sector counting their losses.